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No FY 2011 Federal Budget? As Is Said in Jamaica, No Problem Mon!

September 19th, 2010 · by Isaac Seliger · 5 Comments

If you’ve ever been to Jamaica, which I visited many years ago, no matter what is going wrong at the moment, the response from most Jamaicans is likely to be No problem mon! In case you missed this tidbit in the crush of off-year election news, Congress decided not to even try to pass a FY 2011 federal budget, as reported by CNN Money in “New Year, No Federal Budget.” This would seem to be a problem, as the new fiscal year starts October 1, but like a lot of what happens in Washington, things are not always as they first appear. No problem mon: Congress will keep the federal government running by passing continuing resolutions every month or so until they get around to adopting a new budget. Continuing resolutions allow the federal departments to continue spending budget authorizations from the FY 2010 budget until they run out, then switch to the new authority granted by the continuing resolutions—so they can spend at the same rate. The party continues with or without a budget.

For grant applicants and writers, this means that the avalanche of federal RFPs that I noted in “Here They Come: RFPs Are Thundering Down the Plain, So Look out for the Carol M. White Physical Education Program (PEP), Upward Bound, Choice Neighborhoods, REACH CORE and More” will continue over the coming months. HUD has still not issued most of their FY ’10 NOFAs for programs like Healthy Homes, while we wait patiently for the Department of Education to issue the FY ’10 RFP Talent Search. I suspect that the political appointees (Secretary, Deputy Secretaries, etc.), who run the federal departments knew months ago that Congress was going to use continuing resolutions this year and as a result were in no hurry to issue FY ’10 RFPs. Since they will have continuing resolution authority, they can also speed up the issuance of what would be FY ’11 RFPs.

For those of us who have been writing grants since dinosaurs walked the earth, continuing resolutions are not new. They generally happen when Congress is actually busy in the fall with something important (a rare occurrence), when there is lazy or incompetent leadership in the House and/or Senate (much less rare), and for political reasons (least rare). This year, the lack of a budget is obviously due to political considerations, as many House and Senate races that would ordinarily be considered “safe seats” are hotly contested. No representative or senator is dumb enough to want to vote on a budget bill and then face voters carrying pitchforks and torches, like the mob in one my favorite Mell Brooks movies, Young Frankenstein.* As a result, all incumbents can run on a platform of “cutting spending” and “eliminating waste,” which is always popular. And there will be a Lame Duck session this year, which will still be controlled by the Democrats, regardless of the election results.

If the Republicans take back one or both houses, or just gain a lot of seats, they will be tempted to repeat Newt Gingich’s United States federal government shutdown of 1995. President Clinton outsmarted Gingrich by using the close the Washington Monument approach to public sector budget problems. Seliger + Associates was less than two years old when this bit of political puppet theater unfolded. While I was mildly concerned about grant writing prospects, experience had taught me that, in the end, all politicians love discretionary spending, and, despite the rhetoric, grant-funded programs would not only continue, but expand. When the smoke cleared, federal spending for grant programs was off to the races and our business obviously succeeded. I first learned learned how much politicians love discretionary spending when President Reagan was elected with much fanfare about eliminating federal departments. While a few discretionary programs were axed, such as the HUD UDAG program, the government was soon back to business as usual, and a flood of new discretionary grant programs blossomed.** It happened in 1983, again in 1996, and will happen again eventually in 2011, regardless of the rhetoric and election outcome.

The reality of the near 10% unemployment rate and the depressing news from the 2010 Census that the poverty rate is 14.3%, the highest it’s been in 15 years, will be used to argue for continuing discretionary grant programs. (Erik Eckholm reported on this for the New York Times in Recession Raises Poverty Rate to a 15-Year High).*** As a result, you’ll hear plenty of discretionary grant program defenses built around not hurting widows and orphans. This sort of bad Census news is good news for grant applicants and grant writers, as I predicted in The Census During Hard Times: A Gift That Keeps On Giving.

If the Republicans do well in the election, however, and while the nation is fixating on the political sparring, I think the political appointees will start shoveling money out the federal door even faster, since they will anticipate nominal cuts in the eventual FY ’11 budget that will emerge in the early days of the new Congress. As a result, we should see a renewed flood of RFPs by the end of 2010, as political appointees rush to spend money while they have the budget authority to so.

* As Kenneth Mars’ Inspector Kemp says to Gene Wilder’s Victor Frankenstein, “A riot is an ungly thing… undt, I tink, that it is chust about time ve had vun.”

** For an insider’s view of the budget battles of the early 1980s, see David Stockman’s disenchanted memoir, The Triumph of Politics: Why the Reagan Revolution Failed.

*** Note that 15 years ago almost perfectly matches the Gingrich/Clinton tiff briefly described above. Political history repeats itself.

Tags: Budgets · Government · Grants